Dublin report:The Irish market underperformed most of its European peers yesterday, as financial stocks faltered on the first day of the new quarter.
Allied Irish Bank provided the main news of the day, dropping by 63 cent, or 2.8 per cent, to €21.57 as news filtered through of a profit warning issued by M&T Bank last Friday. AIB holds a 24.2 per cent stake in the US bank, which was forced to downgrade its first quarter earnings estimate as a result of recent problems in the sub-prime mortgages market.
The impact of the profit warning on AIB's share price was "disproportionate" and "largely a sentiment issue", one trader commented, as the net effect on the bank's profits will be relatively small. Nevertheless, volumes traded reached an unusually high level - almost 4.5 million - as investors shied away from the stock, worried that more bad news may be in the offing.
The rest of the financial sector failed to receive much impetus from Northern Rock's upbeat trading statement. Irish Life & Permanent stagnated at €20.55, while Bank of Ireland slipped by 15 cent to €16.00. Anglo Irish Bank was also off on the day, shedding 8 cent, or 0.5 per cent, to close at €15.92.
Meanwhile, in the construction sector, CRH managed to withstand the general negative sentiment towards the property market at the moment, holding steady at €32.02.
Paddy Power was one of the strongest performers on the day, possibly boosted by positive data on the US online gambling sector out last Friday.
C&C improved by 6 cent, or 0.53 per cent, to €11.43, on the back of its impending expansion into continental Europe.
Elsewhere, strong appetite for Independent News & Media pushed its share price up 2.65 per cent, or 9 cent, to €3.49.
Settlement day: April 5th
